A company wants to raise 2 crorefrom different sources. The EBIT of the firm is Rs. 80,00,000. There are three alternative plans available for the firm.
Plan A:Raise the fund entirely through equity shares of Rs. 100 each.Plan B:50% amount through issue of 8% debentures & 50% by equity at Rs 50/share
Plan C:25% amount through issue of 13% preference shares, 30% amount by issue of 9% debentures and remaining amount by equity at Rs 90 each.The tax rate is 30%. If the objective of the company is to maximize EPS, which is the best alternative?
(solve using excel)
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